# C_2008008EN.01001702.xml

| 12.1.2008 | EN | Official Journal of the European Union | C 8/17 |
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12.1.2008

EN

Official Journal of the European Union

C 8/17

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Action brought on 2 November 2007 — Caixa Geral de Depósitos v Commission

(Case T-401/07)

(2008/C 8/33)

Language of the case: Portuguese

Parties

Applicant: Caixa Geral de Depósitos SA (Lisbon, Portugal) (represented by: Nuno Mimoso Ruiz, Francisca Ponce de Leão Paulouro and Carla Farinhas, lawyers)

Applicant:

Defendant: Commission of the European Communities

Defendant:

Form of order sought

| — | declare that the action for annulment brought pursuant to Article 230 of the EC Treaty and, simultaneously and cumulatively, the action brought pursuant to Article 238 of the EC Treaty on the basis of the arbitration clause laid down in Article 18 of the agreement concluded on 15 November 1995 between the Commission and the CGD were brought in accordance with law; |
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declare that the action for annulment brought pursuant to Article 230 of the EC Treaty and, simultaneously and cumulatively, the action brought pursuant to Article 238 of the EC Treaty on the basis of the arbitration clause laid down in Article 18 of the agreement concluded on 15 November 1995 between the Commission and the CGD were brought in accordance with law;

| — | annul Article 1 of Decision C(2007) 3772 of 31 July 2007 in accordance with Article 230 of the EC Treaty; |
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annul Article 1 of Decision C(2007) 3772 of 31 July 2007 in accordance with Article 230 of the EC Treaty;

| — | irrespective of whether the action brought pursuant to Article 230 of the EC Treaty is upheld or dismissed, uphold the action brought pursuant to Article 238 of the EC Treaty and the claim relating thereto and, consequently, order the Commission to pay the sum of EUR 1 925 858,61, plus default interest at the statutory rate of 7 %, calculated from the date on which [formal] notice was given, namely 7 March 2003, until 30 April 2003 in accordance with Portaria (Decree) No 263/99 of 12 April 1999, and at the statutory rate of 4 % from 1 May 2003 onwards until full repayment of the debt in accordance with Portaria No 291/03 of 8 April 2003; |
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irrespective of whether the action brought pursuant to Article 230 of the EC Treaty is upheld or dismissed, uphold the action brought pursuant to Article 238 of the EC Treaty and the claim relating thereto and, consequently, order the Commission to pay the sum of EUR 1 925 858,61, plus default interest at the statutory rate of 7 %, calculated from the date on which [formal] notice was given, namely 7 March 2003, until 30 April 2003 in accordance with Portaria (Decree) No 263/99 of 12 April 1999, and at the statutory rate of 4 % from 1 May 2003 onwards until full repayment of the debt in accordance with Portaria No 291/03 of 8 April 2003;

| — | order the Commission of the European Communities to pay the costs of the proceedings and the costs incurred by the CGD. |
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order the Commission of the European Communities to pay the costs of the proceedings and the costs incurred by the CGD.

Pleas in law and main arguments

Although, in theory, the State may refrain from requiring the CGD to repay the amount claimed by the Commission, the contested decision dismisses from the outset the possibility of the release of an amount owed by the Commission itself to the CGD.

Given that, in the contested decision, the Commission does not make a distinction between the legal position of the State and that of the applicant, it is in the CGD's interests that that decision be annulled since, although it is addressed to the Portuguese Republic, it concerns the CGD individually and directly. The contested decision is vitiated by the following procedural errors:

| — | Lack of reasoning: the contested decision does not contain any explanation of the way in which the Commission calculated the amount of the financial assistance paid in advance by the ERDF and which it considers should be returned to it. In addition, the statement of reasons is contradictory, contains omissions, inaccuracies and errors. |
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Lack of reasoning: the contested decision does not contain any explanation of the way in which the Commission calculated the amount of the financial assistance paid in advance by the ERDF and which it considers should be returned to it. In addition, the statement of reasons is contradictory, contains omissions, inaccuracies and errors.

| — | Error of fact: the contested decision presupposes that the intermediary is to pay the beneficiaries interest subsidies on the loans forming part of the global grant, when that is not the case, those subsidies are to be deducted from the interest which the beneficiaries owe to the CGD. |
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Error of fact: the contested decision presupposes that the intermediary is to pay the beneficiaries interest subsidies on the loans forming part of the global grant, when that is not the case, those subsidies are to be deducted from the interest which the beneficiaries owe to the CGD.

| — | Error of law, infringement of the legal rules relating to the application of the EC Treaty and infringement of the agreement concluded between the Commission and the CGD: in the present case, the fact that, on 31 December 2001, the financial assistance granted by the ERDF corresponded to 82 % of the total amount of interest subsidies due is not contrary to Article 13(3) of Regulation (EEC) No 2052/88 (1). It is true that Article 21(1) of Regulation (EEC) No 4253/88 (2) refers to advances or final payments in respect of ‘expenditure actually incurred’ but charges (not payments) also exist with interest subsidies which did not arise until after 31 December 2001. The debts corresponding to the flux of the residual ERDF subsidies (due for payment) of each loan may be certified by the Commission as ERDF expenses actually incurred and paid. Proof that expenses or charges have actually been incurred is not furnished by the advance payment of those subsidies to the final beneficiaries but by determining the obligations deriving — or ‘to be assumed’ — from binding loan contracts concluded and executed up until that date. There is no obligation whatsoever to anticipate the ‘payment of the subsidies’ which are due on 31 December 2001 or, in the alternative, to open a special account for the deposit of the national contribution. |
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Error of law, infringement of the legal rules relating to the application of the EC Treaty and infringement of the agreement concluded between the Commission and the CGD: in the present case, the fact that, on 31 December 2001, the financial assistance granted by the ERDF corresponded to 82 % of the total amount of interest subsidies due is not contrary to Article 13(3) of Regulation (EEC) No 2052/88 (1). It is true that Article 21(1) of Regulation (EEC) No 4253/88 (2) refers to advances or final payments in respect of ‘expenditure actually incurred’ but charges (not payments) also exist with interest subsidies which did not arise until after 31 December 2001. The debts corresponding to the flux of the residual ERDF subsidies (due for payment) of each loan may be certified by the Commission as ERDF expenses actually incurred and paid. Proof that expenses or charges have actually been incurred is not furnished by the advance payment of those subsidies to the final beneficiaries but by determining the obligations deriving — or ‘to be assumed’ — from binding loan contracts concluded and executed up until that date. There is no obligation whatsoever to anticipate the ‘payment of the subsidies’ which are due on 31 December 2001 or, in the alternative, to open a special account for the deposit of the national contribution.

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| — | Infringement of the principles of proportionality, legal certainty and protection of legitimate expectations: in recitals 19 and 26 in the preamble to the contested decision the Commission justifies the alternative conditions for considering that expenses were actually incurred before 31 December 2001 in the light of the guidelines announced at a meeting of the CDCR (Committee on the Development and Conversion of Regions) held on 29 May 2002, those guidelines having been distributed in the CDCR after 31 December 2001. The applicant admits that those guidelines may contribute to ensuring the closing of the overall subsidies intended to subsidise interest payments and that the interest owed by the borrower is net of those subsidies. None the less, it is also necessary that the implementing decisions and the agreements reached have actually been designed in conformity with those solutions or are compatible with them, which is not the case with the SGAIA decision or the agreement in question. In the guidelines referred to above, the Commission admits that other methods exist for taking account of the expenses in question. One of those methods consists of the so-called ‘assumption’ of all the financing of the subsidies due after closure of the programme, which leads to the presumption that the legal guarantees are permissible. However, that ‘assumption’ actually takes place from the moment at which the CGD cannot require the beneficiaries to pay it more than the interest net of the subsidies. Thus, the contested decision ignores solutions which are more consistent with the SGAIA, easier to execute and less disadvantageous for the intermediary and for the beneficiaries and which are also capable of protecting the interests at stake. On the other hand, the Portuguese Republic and the CGD had legitimate expectations in relying on the subsidy in conditions which are different from those resulting from the guidelines referred to above since they were notified after the programme had been closed. |
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Infringement of the principles of proportionality, legal certainty and protection of legitimate expectations: in recitals 19 and 26 in the preamble to the contested decision the Commission justifies the alternative conditions for considering that expenses were actually incurred before 31 December 2001 in the light of the guidelines announced at a meeting of the CDCR (Committee on the Development and Conversion of Regions) held on 29 May 2002, those guidelines having been distributed in the CDCR after 31 December 2001. The applicant admits that those guidelines may contribute to ensuring the closing of the overall subsidies intended to subsidise interest payments and that the interest owed by the borrower is net of those subsidies. None the less, it is also necessary that the implementing decisions and the agreements reached have actually been designed in conformity with those solutions or are compatible with them, which is not the case with the SGAIA decision or the agreement in question. In the guidelines referred to above, the Commission admits that other methods exist for taking account of the expenses in question. One of those methods consists of the so-called ‘assumption’ of all the financing of the subsidies due after closure of the programme, which leads to the presumption that the legal guarantees are permissible. However, that ‘assumption’ actually takes place from the moment at which the CGD cannot require the beneficiaries to pay it more than the interest net of the subsidies. Thus, the contested decision ignores solutions which are more consistent with the SGAIA, easier to execute and less disadvantageous for the intermediary and for the beneficiaries and which are also capable of protecting the interests at stake. On the other hand, the Portuguese Republic and the CGD had legitimate expectations in relying on the subsidy in conditions which are different from those resulting from the guidelines referred to above since they were notified after the programme had been closed.

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(1)  Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 185, p. 9).

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(2)  Council Regulation (EEC) No 4253/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1).

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